Recently, many retail investors have been asking how to buy fractional shares. In fact, this is a great question, because fractional share trading has truly changed the rules of the game for small-amount investors.

First, let’s talk about what fractional shares are. Simply put, whole shares are traded in units of 1,000 shares (one lot). But sometimes you may only hold a few hundred shares. Those scattered shares that are less than 1,000 shares are called fractional shares, and the minimum unit is 1 share. So how do fractional shares usually arise? Most of the time, it’s because your order wasn’t fully filled, or because they are generated during the process of stock rights issues and dividend distributions.

As for how to buy fractional shares, the process is basically the same as buying whole shares. On your broker’s app order page, switch to the “fractional share trading” mode, and then just enter a quantity between 0 and 999 shares. The threshold is really low—starting from 1,000 NT dollars—making it very suitable for regular fixed-amount investing.

However, you need to pay attention to trading hours. During the trading session, you can buy and sell from 9:00 AM to 1:30 PM, and you can do so only through electronic orders (meaning through the broker’s app). If your order is not filled that day, it will not be automatically carried over to after-hours trading—you’ll need to place a new order. After-hours trading runs from 1:40 PM to 2:30 PM. During that time, you can place orders via electronic order or by phone, but there is only one batch auction matching at 2:30 PM. After the 2:30 PM matching, any orders that were not filled are automatically canceled.

Regarding fees, the way fractional-share fees are calculated is the same as for whole shares: 0.1425% of the transaction amount. Different brokers set a minimum fee (usually starting from 1 NT dollar) and also offer discounts for electronic orders. The discount level ranges from 10% to 60%. For example, if you buy 200 shares of TSMC at NT$1,065 per share, the fee would be about NT$303. With a 50% discount, it would be around NT$152.

How do you buy fractional shares in a way that makes them easier to sell? This is a concern for many people. The liquidity of fractional shares for less popular stocks is indeed worse, so trades tend to take longer to execute. Based on my own experience, if your orders keep not getting filled, you can try a “convert fractional into whole” approach—buy additional fractional shares to reach a full lot, and then sell that whole lot through whole-share trading, which typically has better liquidity. Alternatively, during after-hours trading, you can buy at the limit-up price and sell at the limit-down price, because after-hours only matches once and follows the maximum execution principle, which can increase your chances of success.

The advantages of fractional share trading are the low capital threshold, which lets you buy the stocks you want without putting in a large amount of money, and also helps you keep more available liquidity. In addition, fractional shareholders are still shareholders, so they can receive dividends and stock dividends, though the amounts are smaller.

But you also need to recognize the downsides. First, because liquidity is lower, trades often take longer to complete. Second, although the fee may look low, there is a minimum fee, and if you buy too few shares, the fee proportion becomes high—so it may not be worth it. Also, trading is subject to restrictions: fractional shares can only be placed as sell orders and you cannot place buy orders, and when selling, you must sell in one go.

If you’re still worried about fractional-share fees and liquidity issues, you can also consider Contracts for Difference (CFD). A CFD is trading based on the price difference rather than actual stock ownership. You only need to pay margin, the threshold is lower, and you don’t have to worry as much about liquidity. However, CFDs are more suitable for short-term trading, while fractional shares are better for long-term holding—so the investment styles are completely different.

In summary, the answer to how to buy fractional shares is: if you’re a small investor looking to invest long-term, fractional shares are a good option. The key is to understand trading hours and the fee structure, and also learn some trading techniques to improve your execution rate. Most importantly, stay rational—don’t blindly follow trends—and choose an investment strategy that fits your risk tolerance.